Two Publishers on One Server...

I'm using merge replication with a Publisher and 26 Subscribers. I have another server that is using merge with another 5 Subscribers. Question...Can I move that Publisher onto the server that currently has the Publisher on it? Will there be confusion in the distribution database as it will be working with two different merge replication "profiles", etc.

True, you can support many publishers to one distribution database, but there may be cases where you want to separate logical replication applications into separate databases, for administration purposes. In some cases, there may also be a performance benefit because you may have reduced contention (both writing to and reading from the distribution database).

The publisher and subscriber can never have the same priority; SQL Server enforces this while adding subscriptions.